All Forum Posts by: Quinn Barnett

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Lynchburg.

Purchase price: $160,000
Cash invested: $23,000

Contributors:
Acree, Mark

An old large house near downtown Lynchburg that was originally a duplex but got turned into a spacious quadruplex with two 1 bed, 1 bath units and two 2 bed, 1 bath units. It has a hodge-podge paint job at the moment.

What made you interested in investing in this type of deal?

I was looking for a quad to buy with an FHA originally for a low down payment, high cashflow deal. I was told about this one and it was a quad with room to build equity by updating it which fit well with our goals.

How did you find this deal and how did you negotiate it?

Through a realtor/investor friend who did not want it himself. I negotiated by spending time getting to know the seller and what he wanted out of the situation and helping him get that while not over extending ourselves or purchasing a bad deal.

How did you finance this deal?

It would not qualify for an FHA loan, my initial goal, so I got a family member to partner with me to purchase it under a conventional investment loan with 25% down, 30 year mortgage.

How did you add value to the deal?

Fixing leaks in a bathroom that was dripping into the downstairs unit's kitchen, fixing a leak in the roof, wrapping the windows' trim in metal, having new/working gutters installed. Eventually we will repaint it.

What was the outcome?

Still working on the updates and removing a tenant. Once the new tenant is in, we will be getting $115/door of pure cash flow. We might sell it or refinance in a year if the numbers are right.

Lessons learned? Challenges?

Working without an agent on my side or the buyers side meant we had to do some leg work between contract and closing but it was not as hard as I anticipated

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Mark Acree of the Acree Brothers Real Estate Team, top notch agent/ investor who cares about the people he is helping.
TJ Kuczewski at McLean Mortgage and his team did a good and smooth job getting us to the closing table

Now I know it is not for EVERYONE because some of us are out there getting slamming good deals, but rent to retirement has realitively low barrier to entry (18-35k) and has pretty great returns (12-18%). Why are more people not jumping on that if they don't have great deals locally or enough leads? It seems pretty great. 

I am asking partly because continually saving up for a R2R house every 10 months might be my next investment plan and want to see the cons.

I'm looking at a 160k quad that I would purchase with an FHA loan and have an estimated 3.3% interest rate. Owner financing is an option(slim option though). Would there be any reason for me to pursue that when the interest rate would probably be 5-6% ?

I was thinking about it because there might be considerable repairs required before the FHA loan approval goes through. But considering it does, any reason I would want to miss my 3.5% down payment?

On a BiggerPockets episode (or maybe a Rookie one) awhile back, I heard someone say they had given their sister money to buy a house with an FHA loan while she was in college. Then the sister house hacked it to pay for the mortgage.

My question is, how would that look for the loan? Is it dependent off my income since they do not have one while in school? How much can planning to rent by the room be taken in to consideration as income for the mortgage?

Thanks for your insight!

My friend and I are looking to start an LLC to buy multi-families with other people's money. I have looked into the LLC creation some but any tips/lessons learned on that? Especially on proper way to set the partnership between us and our investor(s)?

Hi Tyler, I messaged you about it

Hi Craig,

I used an FHA to purchase a property with two houses (basically a duplex) in Virginia last year as my first property. The mortgage company asked for a signed addendum saying that one set of tenants had or would be given the non-renewal notice at the time of closing. This is because the requirement is to move in within 60 days of closing. That's what I did and you could do and even have a clause that says the current owner has to deliver the notice to vacate before closing to get that moving faster.

Also, I talked to the property management company that said people often buy with an FHA or "must be primary residence" loan and then say that circumstances changed/prevent them from moving in. I am not recommending that as it seems completely dishonest...but appearently people do it.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Bedford.

Cash invested: $6,000

Contributors:
Logan Bosiger

This property has a main house with an unfinished basement and a guest house. Both were rented previously but I am moving into the main house and plan on fixing the basement to have a second rental on the property. While one unit is rented, my living expenses will be reduced to $150/month plus electricity. Once we get a second unit rented, we should have Pure Cashflow of at least $230

What made you interested in investing in this type of deal?

I listened to the podcast for 10 months. I just got married and having another stream of income and our own house by the end of this year was a huge goal. While I am very interested in more investing and building a portfolio, starting with one or two units allows us to get our feet wet and experience in the different aspects of land-lording

How did you find this deal and how did you negotiate it?

Daily checking of Zillow. It had been on the market for 90+ days and we ended up getting the seller to come down 6k off the asking price with two counter offers.

How did you finance this deal?

We did a FHA loan with 3.5% down

How did you add value to the deal?

The plan is to finish the basement which has its own entrance to make another unit available.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Logan Bosiger was my agent that helped find, negotiate, and seal the deal. TJ Kuczewski at McClean Mortgage Corp. got the financing in place. He was great at understanding my situation from the very beginning of the housing pursuit.